News Article

ASU Trustees Approve Revised Agreement For New $100 Million Campus in Mexico

02/24/2017

MOUNTAIN HOME, Ark. — The Arkansas State University Board of Trustees today approved an updated collaboration agreement with a not-for-profit partner that is building a $100 million campus in Queretaro, Mexico, which will open for classes in August.

ASU System President Chuck Welch said the original agreement with Arkansas State University CQ, A.C., (A-State CQ) in 2014 addressed the campus plans conceptually. The new agreement outlines more specifics about the operations, including financial matters, personnel, academics and safety.

“As our legal counsel told us, this provides all the protections our university would want and assurances our partner would want,” Welch said. “When the original agreement was written, we had not turned a single shovel of dirt. We developed an agreement about what could be, and now this is about what is.”

A-State CQ is the first American residential campus in Mexico and the first university to award degrees recognized in both the United States and Mexico. Welch said cumulative revenue to A-State could total $140 million over 20 years assuming flat enrollment after 10 years.

Among the contract revisions are details about the length of the agreement, termination clauses, indemnity clauses to protect the university and clarification language regarding ownership of curriculum and trademarks. ASU Trustees will approve tuition rates, and the not-for-profit partner is responsible for 100 percent of operational costs.

Payments to A-State will be based on a commission rate with built-in inflation factors instead of the previously planned flat amount per student, said Welch, adding that the cumulative effect “is a tremendous increase in revenue potential for us” and does not change the timetable of payment.

State funds are not being used to build or operate the 800,000-square-foot Mexico campus. All of A-State’s startup personnel and travel costs are reimbursed with funds from private gifts. The 10-year agreement may be renewed for two five-year increments. A-State will receive commission based on the number of students enrolled. Projected annual revenue with 2,100 students is $1.39 million and with 5,100 students is $8.87 million.

Welch praised the work of ASU System General Counsel Brad Phelps and the Squire Patton Boggs law firm, which is licensed in both the U.S. and Mexico, on the agreement.

“The agreement is very fair to all parties involved and addresses complex international issues,” he added. “We just returned from Queretaro and saw some tremendous progress.”

New Trustee Price Gardner of Little Rock said of the campus: “You can read about it, look at video and get a feel for it. But the opportunity to go down and spend two days gives me much greater appreciation for the project – the magnitude, logistics. I’m grateful for their passion and commitment.”

The three top executives of A-State CQ attended the board meeting, and Welch described them as visionary.

In emotional remarks by the Mexico delegation, A-State CQ General Director Edmundo Ortiz promised to represent the university and the system positively and “make a difference for everybody.”

“Thanks for trusting us,” said Ricardo Gonzalez, president of the organization and principal investor. “We will do everything to make you happy.”

Welch said Ricardo wanted to leave a lasting legacy for his country and give young people opportunities he has received.

Belinda Salazar, operations director for the organization, said work on marketing plans continues with a large database of students who want to enroll. She said 10 buildings are under construction now, four residence hall buildings will be added next year and a second academic building will be added in year three to support a projected 5,000 students.

Chancellor Search Update

Welch said the search for a chancellor at A-State is under way. Applications will be accepted through mid-April, and finalists will be brought to campus in May. The goal is to hire a chancellor by June 1.

“[Interim Chancellor] Doug Whitlock has done a phenomenal job,” Welch added. “He has tremendous perspective, has been a calming influence and is a great asset to me.”

NYITCOM at A-State

The New York Institute of Technology College of Osteopathic Medicine at A-State “continues to exceed what we dreamed,” Welch said. “NYIT has had a tremendous response with a large number of Arkansans enrolled.”

He thanked the Delta Regional Authority and Federal Co-Chairman Chris Masingill for a recent $200,000 grant that will help create a Delta-based medical residency consortium. “DRA has been a major help. They provided funding for the feasibility study and now supporting the development of residencies.”

Campus Reports

In other presentations, A-State Chancellor Doug Whitlock noted that a new joint poultry science program between Arkansas State and the University of Arkansas is the first academic agreement between state’s two largest universities.

Chancellor Karla Fisher of ASU-Beebe said her campus’s watch word is “efficiency” to keep higher education affordable for students. Several administrative positions have been eliminated during a restructuring process.

ASU-Newport has implemented the first phase of a new campus management software system and is preparing for a reaccreditation visit by the Higher Learning Commission, Chancellor Sandra Massey told trustees.

Other Business

In other business, the Board:

Conferred the designation Trustee Emeritus to Howard Slinkard of Rogers, who served on the ASU Board from 2007-2017, including two terms as chairman.

Adopted a resolution to name the U.S. Supreme Court Associate Justice Antonin Scalia Criminal Justice Institute at ASU-Mountain Home. Scalia, who died in February 2016 after 30 years on the court, visited the campus in 2015 and participated in criminal justice programs.

Approved a Board of Visitors policy that allows each campus to form informal entities that may provide input to the Board of Trustees. Candidates for the first ASU-Beebe Board of Visitors were also approved, including Howard Chapin, Hazel Dickey, Butch Rice, Buck Lane, Cathy Oeff, Felipe Barahona and Diane Tiner Logan.

Adopted revisions to the staff handbook regarding the Sexual Discrimination Policy and Sexual Discrimination Grievance Procedure. The changes expand personnel who are mandatory sexual discrimination reporters and give the Title IX coordinator more time to investigate complaints.

Approved establishment of the Arkansas State University-Mountain Home STEM (Science, Technology, Engineering and Mathematics) Academy, which will facilitate high school students who want to take concurrent college courses.

Following an executive session, the Board approved several academic and non-academic appointments.